Trends in the currency markets are one of the most important and basic elements to trading. Incorrect recognition or interpretation of trends can have a devastating effect on traders. At some point in your investing career, you are most likely going to hear the cliche “the trend is your friend”.

Of the many market sayings that traders throw around, none may be more overused and less understood than the adage "The trend is your friend" As a trader, you have probably heard the old adage that it is best to trade with the trend. The trend, say all the pundits, is your friend. This is sage advice as long as you know and can accept that the trend can end. And then the trend is not your friend.

Trend following is an investment strategy based on the technical analysis of market prices, rather than on the fundamental strengths of the companies. In financial markets, traders and investors using a trend following strategy believe that prices tend to move upwards or downwards over time.